Thread Options
#2034428 - 08/19/15 01:21 AM EDD on Wires
PrimeTime Offline
100 Club
PrimeTime
Joined: Nov 2014
Posts: 173
Looking to get some opinions on how to proceed.

Outgoing domestic consumer customer wire in large amount for FI's customer base/location, with an IOLTA as a beneficiary. Has all information to satisfy travel rule requirements, however given the dollar amount and that it's going to an IOLTA (meaning we don't know ultimate purpose/beneficiary) so it was decided EDD is necessary to find out. As with anything, there was kickback when attempting to have customer outreach to verify purpose. It was decided by management that there would be no outreach, as travel rule requirements were satisfied. It should probably also be noted that again as most of these situations are, it is a wealthier customer whose relationship would not want to be lost, hence the opposition to asking questions.

What would I look to obtain for my CYA (cover your behind) file? Would a copy of the wire signed by management suffice, or would a memo with acknowledgement/email be the best course of action? Either of these would be difficult to get at this point, as it's already said and done. My opinion on this transaction is that due to the size of the wire, customer type, etc, EDD should be conducted. Advice is welcomed!
_________________________
Life is like a bicycle. To keep your balance, you must keep moving.
-Albert Einstein

CAMS

Return to Top
BSA/AML/CIP/OFAC Forum
#2034437 - 08/19/15 10:00 AM Re: EDD on Wires PrimeTime
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
You've done what you can do. Document your actions with a memo to file.

Generally, everyone agrees that in a circumstance like yours, an unusually large wire, particularly for a consumer, it's important to obtain a statement of purpose. The problem is that if a statement of purpose is requested on a "case by case" basis customers realize they're being treated differently and feel comfortable saying "No."

When a bank requires a statement of purpose for every wire and resistance is futile, it goes away. Requiring a statement of purpose is fundamental due diligence and a rather pale requirement in comparison to banks that require a copy of the invoice before sending the wire.

You can best support your file on this particular situation by including a copy of a request to management that bank policy be revised to obtain a statement of purpose for all outgoing wires. Explain how you will give advance notice of the change to existing wire customers and how the information will be used in your AML efforts.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top
#2034447 - 08/19/15 12:46 PM Re: EDD on Wires Elwood P. Dowd
ACBbank Offline
Power Poster
ACBbank
Joined: Jul 2006
Posts: 3,959
New York City
Originally Posted By Ken_Pegasus


When a bank requires a statement of purpose for every wire and resistance is futile, it goes away. Requiring a statement of purpose is fundamental due diligence and a rather pale requirement in comparison to banks that require a copy of the invoice before sending the wire.


This. We require the purpose of all outgoing funds transfers. It eliminates most of the protesting.
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

Return to Top
#2034455 - 08/19/15 01:12 PM Re: EDD on Wires PrimeTime
Daisy Doodle Offline
Diamond Poster
Joined: Feb 2014
Posts: 1,030
Southern U.S.
This is incoming right? Do some banks require purposes on all incoming wires?

I guess I don't really see it as suspicious? There would be legitimate reasons for an attorney to receive a large wire to an IOLTA. Something sold on behalf of a client, proceeds of a suit the attorney participated in?

Return to Top
#2034470 - 08/19/15 01:44 PM Re: EDD on Wires Daisy Doodle
HappyGilmore Offline
10K Club
Joined: Jun 2004
Posts: 19,311
Pulling people out of the ditc...
Originally Posted By Daisy Doodle
This is incoming right? Do some banks require purposes on all incoming wires?

I guess I don't really see it as suspicious? There would be legitimate reasons for an attorney to receive a large wire to an IOLTA. Something sold on behalf of a client, proceeds of a suit the attorney participated in?


Quote:
Outgoing domestic consumer customer


it was outgoing...we have a section on our outgoing wire form for the purpose of the wire, it is the banker's responsibility for completing, but if the information is left blank the wire still goes.

obviously our customers originating via OLB do not have a stated purpose portion on outgoing wires
_________________________
Providing alternative truths since the invention of time

Return to Top
#2034474 - 08/19/15 01:50 PM Re: EDD on Wires Daisy Doodle
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Hmmm, I read it as "outgoing" and responded accordingly. Now, I'm not at all sure.

Banks are not in a position to "require" much of anything on an incoming wire, even compliance with the travel rule. If it's an incoming wire to an IOLTA account the lawyer's going to tell you to push off or something to that effect.

Only a footnote: I know of a state banker's bank that will not send a wire for its bank clients if it does not contain a statement of purpose. Interesting that an intermediary would impose such rigidity, but they apparently had international wires rejected for lack of the information in some countries and just decided that they would require it for all wires, domestic and international.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top
#2034497 - 08/19/15 02:27 PM Re: EDD on Wires PrimeTime
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,333
Cape Cod
Quote:
obviously our customers originating via OLB do not have a stated purpose portion on outgoing wires


Why not? You might even get more responses using the online request than you do with the in-person written request if you add a mandatory entry field to the online wire request form. If the system keeps rejecting the request because the field is void, at least you would get some sort of response, even if it's "MYOB."
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#2034596 - 08/19/15 06:24 PM Re: EDD on Wires PrimeTime
HappyGilmore Offline
10K Club
Joined: Jun 2004
Posts: 19,311
Pulling people out of the ditc...
Multiple reasons why not, first being that the current platform we use does not support this and modifying it, and our corresponding back office interfaces, are cost prohibitive. Now, if it becomes a regulatory requirement...
_________________________
Providing alternative truths since the invention of time

Return to Top
#2034699 - 08/19/15 09:50 PM Re: EDD on Wires PrimeTime
PrimeTime Offline
100 Club
PrimeTime
Joined: Nov 2014
Posts: 173
Thank you all for the responses! Certainly seems to agree with what I was thinking, and to clarify it was in fact an outgoing wire.

I think the fact that it's not in any of our policies that all outgoing wires requested in person (as opposed to OLB, although a mandatory field can probably be created) require a statement of purpose. Certainly something to address in this year's policy update. And as Happy mentioned, if it becomes a regulatory requirement, problem solved!

It's not that I necessarily believed it was suspicious, it's that due to the size of the wire in relation to a consumer account (over $1MM), I felt as though I would be more comfortable with an explanation as opposed to "it's going to an attorney, end of story". Just because it's going to an attorney doesn't mean that it's 100% safe, there have certainly been cases where attorneys are involved in suspicious activity.
_________________________
Life is like a bicycle. To keep your balance, you must keep moving.
-Albert Einstein

CAMS

Return to Top

Moderator:  Andy_Z